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Dow futures briefly add 250 after China data; oil eyed

U.S. stock index futures pointed to a sharply higher open on Tuesday, ahead of a number of financial earnings reports after a raft of data out of China in line with expectations.

U.S. crude oil futures held steady, while Brent crude futures were more than 2 percent higher above $29 a barrel.

Dow futures held about 200 points higher as of 9:07 a.m. ET. The index was briefly up around 250 points in premarket trading, after the Chinese data and key financial earnings from Bank of America and Morgan Stanley. UnitedHealth also reported before the bell, as stock market reopens after the Martin Luther King day holiday on Monday.

Traders work on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders work on the floor of the New York Stock Exchange.

IBM, Netflix and Linear Tech are all due after market close.

Earnings are expected to show the worst decline since the financial crisis, yet analysts are holding out hope that the bar is low, they'll beat and help pull the market out of its worst new year slump ever.

Other data due for release on Tuesday includes the NAHB housing index at 10:00 a.m. ET.

Official data showed that China's gross domestic product data came mostly in line with market expectations, though factory output and retail sales dipped slightly below forecasts.

The world's second-largest economy also grew by 6.8 percent in the fourth quarter of 2014, slipping by 0.1 percent from the third quarter's 6.9 percent growth. This was in line with the median forecast in a Reuters poll.

Full-year growth same in at 6.9 percent, down from 2014's 7.3 percent, and the slowest pace of economic expansion since 1990.

"The fear of a rapid slowdown in China is a big cause of concern to the world, given a dependence on it as one of the last big engines of global expansion," said head of global equities at Henderson Global Investors, Matthew Beesley.

"Investors have temporarily lost their compass. Right now, they are still questions on whether rates should be rising in the U.S. and whether deflationary pressures still abounding, clearly we are seeing that in energy prices and I think investors are feeling dislocated to the "norm" they got used to post-2008," he told CNBC.

In Europe, stocks traded around 2 percent higher following the Chinese data.

Chinese stocks surged following the data, with the Shanghai Composite ending over 3 percent higher.